In 2022, properties not listed on realestate.com.au sold on average for 4.3% less than those that were.
Some sellers try to save money by not advertising online, but this research demonstrates this tends to translate to a consistent drop in sale price, which chief economist Paul Ryan says is normally much more than advertising expenses.
"While some sellers might try to save money by not advertising online, this analysis shows the potential earnings lost in the final sale price far outweighs the initial cost of advertising," Mr Ryan said.
In Sydney for example, the sale price for unlisted properties dropped by more than 4%, meaning losses over $60,000 for the average property.
According to realestate.com.au, basic marketing costs (advertising in front of the house, listing, photography etc) range from $1,000 to $10,000, although more expansive marketing like drone footage is likely to be more expensive.
Off market properties also sold for cheaper in Melbourne (a 2.6% drop), Brisbane (a 3.6% drop) and Perth (a 4.9% drop).
In all three cities, this translated to losses of more than $20,000 for the average sale.
High priced and regional areas perform worse off market
The report also found areas with a higher median price tended to see bigger drop offs in sale price for off market transactions.
The national median property sale price is around $725,000, and unlisted properties sold in areas where the median price was lower than this decreased between 3 and 4%.
This difference was above 5% in areas with a median price above $725,000, and more than 6% for those with a median price exceeding $1,000,000.
Off market sales in regional areas also saw a bigger drop off in price than the state's respective capital cities.
Regional New South Wales saw 10.3% lower sale prices, compared to 4.3% in Sydney.
Buying off market
If you're selling your property, this drop off in sale price is likely to significantly outweigh the expenses associated with listing a property on selling platforms.
For buyers though, off market properties are a potential discount opportunity.
There typically will be less competition between buyers, so the price isn't pushed up, and the sale often goes through quicker and more discreetly.
Finding off market properties is obviously a bit more work, but there are plenty out there.
Simon Cohen, co-founder and CEO of Cohen Handler, told the Savings Tip Jar podcast about 80% of the properties his company purchases are off market.
Buyers agents with industry connections and experience can be particularly useful in finding properties not yet actively marketed, or owners who aren't actively looking to sell, but will for the right price.
Another way to find unlisted properties could be Domain's off market property alerts.
Buyers can crate an alert on Domain with the property features they are looking for, and have off market properties sent through email or app notifications as soon as properties become available through an agent.
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